Appraisals Prominent in 2013 Farm Bill

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Appraisals Prominent in 2013 Farm Bill

By Bill Garber, Director of Government and External Relations, Appraisal Institute (AI) in Washington, DC

The 2013 Farm Bill is taking shape in both the House and Senate, with the full Senate slated to vote this week on its version (S. 10, the Agriculture Reform, Food, and Jobs Act of 2013). This bill contains several appraisal related programs and provisions of note, below.

• The bill proposes to establish an Agriculture Land Easement (ALE) program (Sec. 1265), which is a consolidation of existing easement programs into one, with a maximum 50 percent federal cost sharing. Valuation policies remain unchanged from the previous Farm Bill, which allows fair market value to be established through a USPAP-complaint appraisal or area wide market analysis; a geographic cap established by the Department of Agriculture by regulation; or an offer made by the landowner. A permanent easement program relating to wetlands utilizes the same valuation options in establishing compensation to landowners, taking the lowest option while still encouraging participation in the program.
• The bill proposes (Sec. 3103) a 75 percent loan guarantee program for conservation loans, which can be used for such things as creating pastures, installing waste management systems, or establishment of forest cover for timber management. Value of the farm for loan purposes would be established through the use of appraisals prepared by competent appraisers. A provision also prohibits mineral rights from being considered as part of any appraisal considered for loan purposes.
• A debt adjustment program (Sec. 3408) would rely on current appraisals for loan restructuring and farm property disposition. The value of land would also be considered in any debt cancellation measure agreed upon by the Department of Agriculture. Appraisals would also be used in loan principle write downs, with the average of two corresponding appraisals being used to establish a final value amount.
• The Stewardship End Contracting Project (Sec. 602) is authorized to use the value of timber or other forest products as offsets to participate in the program. Value is established through appraisals that use appropriate methods commensurate with the quantity of products to be removed. The valuations may be determined using a unit of measure appropriate to the contracts or valuing products on a per-acre basis.

A Senate Agriculture Committee prepared summary of the bill is available at :  The House Agriculture Committee approved its version of the bill on May 16. A summary of the major provisions can be found at:

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